Finding Stocks to Invest in does not Have to be a Gamble

Dec 9th, 2010No Comments

The majority of Americans and others around the world today would say with conviction that finding stocks to invest in is a complete gamble. Given the way in which most people invest I would have to agree. Proper investment management is the secret.

Wealthy Investor shows you how to make investing long term in stocks as near to a certainty as possible by getting the market itself tell us the best stocks to buy right now. But you must diversify, put equal amounts of money into each investment, and refuse to panic when an investment temporarily goes against you. The odds are at least 8 – 1 it will come back and return a profit.

Proper diversification, as described in another article, is essential
You must learn to rely on yourself and not expensive and sometimes not very good professionals
Safe and successful investing is for the long term (with few exceptions)
Choosing your investments is commonsense, not mysterious science

You must have a solid system for investing or it becomes a seat-of-the-pants affair.

Simple once you know how

Successful investing is simple once you know how – just, I suppose, as rebuilding a car engine is simple once you know how, except that successful investing is a lot easier. You will find out just how easy it is.

Let’s deal with choosing the right stocks, an activity many people find most stressful. Most beginners get it wrong, which is why stocks get such a bad rap, especially in times like those we went through a couple of years back. They lose money and their friends assume stock market investment is suitable only for professionals. First piece of advice (coming from a former professional) avoid professionals. Most are simply salespeople with a bit more knowledge that you.

Betting on one or two stock market investments on a tip or a hunch is a surefire way to lose, if not the first time then the second or third. Eventually, you will have less money than you start with. A portfolio needs a fully diversified selection of stocks, preferably between 10 and 20.

The best stocks?

So if you’re not going to rely on professional advice, how are you going to find the best stocks to buy right now? That’s another typical mistake of people beginning investing programs. What stocks to buy is not the question. Accept the fact that you will rarely pick the best and if you do it will be more by luck than cleverness. Your job is not to pick the best; it is to pick a broad selection, each in a different industry. You want to choose shares of companies that you expect to last. That’s all!

Where do you find the best stocks to invest in? Start with what products you and your friends buy and trust. What provides quality and value? But be careful; don’t assume that soup and peanut butter in the grocery store represents diversification. Both are food. More than that, they are often survival food popular when times are tough.

What about the auto industry, in trouble in much of the world recently? What is the strongest company worldwide? No one said you have to stick with products made in America. That also would not be diversification. Which company, in your best guess, will come out with the most reliable, affordable and convenient electric car, for instance?

What about air travel? Airlines are repeatedly getting into trouble, going broke or looking for help. But the folks who manufacture the planes they fly and also supply armed forces are not likely to go under any time soon. People cannot walk on water, or take the time to cross the Atlantic in ships as they once did; we will always insist on being able to fly (though, depending on the price of fuel, it may be in balloons)!

See where I am headed with this?

Your job is to build an across-the-board average return. You will pick a few companies that perform exceptionally well for a time, others that lag for a time, and others that are middle-of-the-road. You notice use of the phrase “for a time”? Companies for a variety of reasons sometimes do outstandingly well then sometimes maybe they have nothing fresh to tell investors and get left behind. Time is a great leveler.

You may have been put off by “average return”. Don’t be; that’s just the starting point for the system you are about to learn. I don’t like “average” any more than you do – but do your investments even give you a net average return?

The stock market has averaged more than 10 percent since records were kept, regardless of depressions, recessions, wars and every other horrible event you can imagine. With such a lengthy history, there is little reason to believe history will not repeat itself.

Wealthy Investor Weekly will not pick the stocks for you, but it will help you buy at a reasonable price and get out when the time is right. Despite the high past returns, don’t expect miracles all the time.

But you will learn after a while that successful stock market investment is easy, and finding good stocks to invest in is easy too. There’s even a mechanism to tell you the best stocks to buy right now.